If you are a W-2 salesperson

Are my commissions protected by law?

Yes, once they are earned. New York defines "wages" to include earnings "determined on a time, piece, commission or other basis" (Labor Law § 190(1)). An earned commission has the same protection as your paycheck.

Not every payment counts. A bonus that comes out of a company-wide pool, depends on the company's overall results and is divided at management's discretion is not a wage. The employee lost on that point in Truelove. Pay tied to your own sales under a set formula is on the protected side of the line.

Am I entitled to a written commission plan?

Yes. New York requires the agreed terms for a commissioned salesperson to be put in writing (§ 191(1)(c)). The writing must be signed by both you and the employer, explain how your pay is calculated, state how often any recoverable draw is reconciled, and say what happens to your pay if either side ends the job. The employer must keep it for three years. You are also entitled to a wage notice when you are hired that states how you are paid (§ 195(1)).

If the employer cannot produce the written plan when the New York State Department of Labor asks for it, your account of the terms is presumed correct. The presumption is triggered by the Department's request, not by yours, which is one practical reason to file a Department of Labor complaint when there is no written plan.

Who is covered. These writing and timing rules protect employees whose main job is selling and who are paid at least partly by commission. They do not cover employees whose main job is supervisory, managerial, executive or administrative (§ 190(6)). A sales manager still has the protections against deductions and the remedies described below.

When is a commission "earned"?

When you have done the selling. You do not need a written plan to earn a commission. The employer is required to put the plan in writing, but its failure to do so does not cancel your right to be paid. New York's highest court has held that when a commission is earned depends on the parties' agreement, "express or implied," and that an implied agreement can be shown by how the company actually paid commissions over time. If there is no agreement on the point, a commission is earned when the salesperson produces a buyer ready, willing and able to buy (Pachter). "The lack of a specific written contract is not determinative."

A written plan can set out how commissions are calculated, and courts have enforced formula terms such as netting out returns. But a plan cannot take away a commission you have already earned, whatever it says. See the next question.

What to do: document what you did on each deal and when you did it — the lead, the quote, the signed agreement, any deposit or implementation fee. Then find the sentence in your plan, if there is one, that says when a commission is earned. How the company paid other salespeople in the same situation is also evidence of the real terms.

My plan says I am not owed the commission. Doesn't that settle it?

No. Commission plans often contain terms that violate the Labor Law, and those terms are unenforceable no matter how clearly they are written or whether you signed. Parties "are not free to enter into contracts which violate public policy," so an employee "could not contract to forfeit" earned wages, and New York's "long standing policy against the forfeiture of earned wages . . . applies to earned, uncollected commissions as well" (Weiner).

Plan terms that commonly fail against earned commissions:

• "You must be employed on the payment date." It cannot cancel a commission you had otherwise earned (Arbeeny; Zia-Ul-Haq).
• Chargebacks and clawbacks of earned commissions. The Labor Law allows only a short list of deductions (§ 193), and a plan clause "authorizing" chargebacks is not on it. Neither is a demand that you write a check back (§ 193(3)(a)). Since 2021 the statute adds that there is "no exception to liability . . . for the unauthorized failure to pay wages" (§ 193(5)). See Gennes and Karic.
• Long holds on a departing salesperson's pay. Commissions are due at least monthly, by the end of the month after they are earned (§ 191(1)(c)), and final wages by the next regular payday (§ 191(3)). "No employee shall be required as a condition of employment to accept wages at periods other than as provided in this section" (§ 191(2)).
• "By continuing to work, you accepted the change." Silence does not rewrite a written plan (Karic).
• Calling a formula commission a "discretionary bonus." The label does not control (Zia-Ul-Haq; compare Truelove).

The line to remember: a plan can decide how commissions are calculated for sales going forward. It cannot take away a commission once you have earned it.

Can my employer take back a commission it already paid?

Not once it is earned. Courts have rejected chargebacks against earned commissions for a customer who did not renew (Gennes) and for vehicle damage, mechanical problems and discipline (Karic). The company, not the salesperson, carries the business risk.

The exception is built into the definition of "earned." If the plan says a commission is not earned until returns, cancellations or negative growth are netted out, those adjustments are usually part of calculating the commission rather than a deduction from it (Cohan; Pachter).

What about my draw? Do I have to pay it back?

• A non-recoverable or guaranteed draw is yours, even in a bad month.
• A recoverable draw offset against future commissions. Where the plan clearly says commissions are earned only after the draw is reconciled, courts have allowed the employer to subtract the draw from later commissions (Levy). Your plan must state how often the draw is reconciled (§ 191(1)(c)).
• Taking a shortfall out of your base pay, or demanding it back after you leave. New York's rules on wage advances require a written authorization signed before the money is paid, stating the amount and the repayment schedule, and a way to dispute deductions. Money that does not follow those rules "may not be reclaimed through wage deductions" (12 NYCRR § 195-5.2). How these rules apply to commission draws is not yet settled, so a demand like this is worth a lawyer's review.

Can my employer change my commission plan?

Going forward, usually yes. Backward, no. The law requires your terms in a writing signed by both sides, so a change announced only by email or at a meeting, without a new signed writing, is open to challenge. Changes to rates, quotas, caps, territories and house accounts are generally allowed for sales not yet made if the plan permits them. Commissions already earned cannot be taken away by a later change: "Once the commission is earned, it cannot be forfeited" (Arbeeny). Keep every version of your plan and every email announcing a change.

I was fired, or I quit. What happens to my commissions?

• Commissions on sales you completed before you left are not "post-termination commissions." You earned them while employed, by doing the selling. They do not lose that status because they became payable after your last day, once someone else finished non-sales steps such as delivery, billing, implementation or the customer's first payment. Payability is not entitlement (Arbeeny; Zia-Ul-Haq).
• Reassigning the account does not change who earned it. If the company handed your account to another rep who did not do the selling, the commission you earned is still yours, and the company's own records naming you as the rep who booked or originated the deal are strong evidence (Yudell).
• Being fired to avoid paying you is its own claim. Even an at-will employee may claim that the "termination action was specifically designed to cut off commissions that were coming due" (Arbeeny, quoting Wakefield). These claims usually go to a jury rather than being decided on paper.
• Business you had not yet sold is different. Commissions on deals still in negotiation, future renewals, or new business from an account generally depend on what was agreed (Devany).
• Be ready for the employer's best case. In Linder a salesman lost commissions on customer payments that arrived after he left: for seven years he had received regular commission statements and the company had always paid only when customers paid, so that was the agreed earning point. Whether you ever received the plan or statements, and whether the company applied its rule consistently, can decide the case.
• Payment timing. Final wages are due by the next regular payday (§ 191(3)), and commissions no later than the monthly deadline in § 191(1)(c). A long hold on a departing salesperson's commissions can itself violate those deadlines.

Can my employer enforce a non-compete, or make me forfeit pay for competing?

New York has no statute banning non-competes as of September 2026. A bill that would void most of them (S9759) passed the State Senate in June 2026 and is pending in the Assembly. For now, courts enforce a non-compete "only to the extent reasonable and necessary to protect valid business interests" (Morris).

Forfeiture is a separate question. An employer may make deferred compensation depend on not competing, and if you quit voluntarily that forfeiture is generally enforced (Morris). If you were fired without cause, it must be reasonable. Earned commissions are wages and cannot be forfeited for competing.

Am I owed overtime and minimum wage?

• Inside, phone, online and remote salespeople are generally owed overtime at time and a half after 40 hours, and commissions count in the rate (29 U.S.C. § 207(e)). Selling by phone, email or video, or from a home office, is not "outside sales" (29 C.F.R. § 541.502; 12 NYCRR § 142-2.14(c)(5)).
• True field salespeople who customarily sell away from any fixed company site are exempt from overtime and minimum wage. They keep New York's commission-payment, writing and anti-deduction protections.
• Retail and service-business salespeople can be exempt from overtime only if more than half their pay over a period of at least a month is commission and their regular rate is more than one and a half times the minimum wage (29 U.S.C. § 207(i)).
• Minimum wage is measured week by week. A good month does not cover a week when commissions fell short (Karic). For 2026 the New York minimum is $17.00 an hour in New York City, Nassau, Suffolk and Westchester, and $16.00 elsewhere (12 NYCRR § 142-2.1).

My pay stubs do not show how my commissions were calculated. Does that matter?

It can. Employers must give a wage notice at hiring (§ 195(1)) and an accurate statement with each payment (§ 195(3)), and the penalties can reach $5,000 for each violation (§ 198). In federal court you must also show that the missing or inaccurate paperwork actually harmed you, for example by keeping you from noticing an underpayment (Guthrie). State courts do not apply that federal requirement.

Can I be fired for complaining about my commissions?

No. New York bars retaliation against an employee who complains, reasonably and in good faith, that the employer is violating the Labor Law, and your complaint does not have to mention the law (§ 215). You have two years to sue, and you must serve notice on the New York Attorney General when you file. Remedies include lost pay, reinstatement or front pay, liquidated damages up to $20,000, and attorney's fees. New York's whistleblower law (§ 740) covers reports of other legal violations and carries punitive damages for a willful violation.

Can the owners be held responsible personally?

• The people who run the business. Officers and managers who control hiring, firing and pay can be personally liable as "employers" (Karic).
• The largest owners. The ten largest shareholders of most New York corporations (Business Corporation Law § 630) and the ten largest members of an LLC (Limited Liability Company Law § 609(c)) are personally liable for unpaid wages — but you must give written notice within 180 days after you stop working, measured from your last day of actual work, and courts do not extend it (Ingvarsdottir). If the company is failing, send that notice early.

What can I recover, and how long do I have?

Under § 198 you can recover the unpaid commissions, an equal amount as liquidated damages unless the employer proves it acted in good faith, prejudgment interest and attorney's fees, and a judgment left unpaid 90 days after entry increases by 15%. The deadline is six years. Federal overtime claims must be brought within two years, or three for a willful violation.

I signed an arbitration agreement. Can I still do anything?

Yes. Many commission plans require individual arbitration and waive class actions, and courts generally enforce those clauses. An arbitration clause changes where your claim is heard, not whether you have one. Without such a clause, a commission policy applied to a whole sales team can be challenged in a class or collective action.

Should I go to the Department of Labor or to a lawyer?

Either, and sometimes both. A complaint to the New York State Department of Labor is free, and it is what triggers the presumption in your favor when the employer has no written plan. A lawyer can pursue liquidated damages, fees and personal liability against owners, and can move quickly on the 180-day owner deadline.